Insurance policing of personal behavior other than perhaps smoking (which some do) might not be very practical to do, particularly since “healthy habits” can be subjectively graded or graded with not all people have the same grading scale (e.g. How “healthy” is that meal you just ate? Is it more or less “healthy” based on your genetic background? If self-reported, how honest will a policy holder be about the amount of vegetables s/he eats?). So it is not surprising that insurance companies do underwriting based on results (medical underwriting of pre-existing conditions including obesity, auto insurance underwriting of crashes and citations) rather than trying to measure relevant personal behavior.
MODERATOR’S NOTE:
As a reminder, this thread is about ACA; all posts should be somewhat related to the topic.
That’s what insurance is – the vast majority of people in the pool paying the large claims of the few who have catastrophically expensive illnesses. And almost all of us will be the one with the large claim, sooner or later. If you were to get an expensive illness tomorrow, you’d sure hope there were a whole bunch of healthy “someone elses” to pay for YOU.
BTW, the “current effort” is actually quite popular – as long as it’s not called “Obamacare.” Guaranteed issue, no caps, kids on parents’ policies, no-cost preventive care, premium assistance for low-income – all of these poll at 80% or better. Scroll halfway down, to Table 2 “Americans’ Opinions of ACA Provisions”:
http://kff.org/health-reform/poll-finding/kaiser-health-tracking-poll-november-2016/
People who think they hate the health care law are in for a nasty surprise when it gets overturned.
Right, they’d happily make a contract with you, happily take your money for years, and then when you got expensive, they’d go back and do the underwriting they should have done before they ever accepted your business. They’d rescind for accidental errors and omissions. They’d rescind for conditions wholly unrelated to the current expensive illness. They’d rescind because your application indicated the wrong dosage on an antibiotic you took 5 years ago. They paid big bonuses to employees who found reasons to rescind an expensive subscriber. They were perfectly willing to pay the resulting fines and judgments because it saved them so much money. They boldly told Congress that they would not stop these abuses.
Of all the reprehensible things insurance companies used to do, rescission was one of the worst.
Is there any hope the narrow networks can be changed? With our ACA HMO, we don’t have a lot of confidence in the quality of the specialists or hospitals that are in-network.
Narrow networks are successful because narrow networks are cheap networks, and many private insurance buyers are price conscious.
However, anecdotally, some networks are inadequate. We can press for laws requiring accurate, up to date listings of participating providers. We can press for existing laws that require insurance networks to be adequate-- probably most or all states have these laws-- to be vigorously enforced. We could press for national laws on these matters,
Insurers with narrow networks have been the most successful insurers in the private market. I doubt they will disappear. People might not like them, but as with plane tickets, people are voting with their dollars, not what they say their preferences are.
@Midwest67 This is a good analysis of the problems with ACA, and how they could have been fixed. It was written before the repeal-and-replace crowd was swept into office, so we’re now back at square one, instead of being several steps along the learning curve. http://fivethirtyeight.com/features/insurers-can-make-obamacare-work-but-they-need-help-from-congress/
One big cause of narrow networks has been a relative lack of young and healthy subscribers in the pool, which led to higher premiums for those in the pool, which led to insurers cutting back on networks to keep costs somewhat under control (and profits flowing). Since the new folks reject the mechanism which ACA uses – the individual mandate – whatever the new scheme is will have exactly the same problem, a disproportionately older-and-sicker risk pool. It’ll be interesting to see what mechanism they think is better at getting the young-and-healthies. Personally, I can’t think of what that would be.
I’m not sure why you blame narrow networks on the insurers. When given a choice, buyers pick the narrow networks over wider (and more expensive) networks. The insurers who were offering wide networks were losing money.
That’s true, but consumers want both wider networks and lower premiums. The only way to do that is to get a lot more young and healthy subscribers in. I haven’t heard anything in the proposed replacements which would come close to doing that.
IMO, ACA would have been a lot more successful if they had set the penalty to equal the annual unsubsidized cost of the premiums. Rational young-and-healthies would have signed up in droves, understanding that if they were going to pay for insurance, they might as well have insurance.
@Cardinal Fang
I know the sentence started with “when given a choice”, but that’s the thing, isn’t it? For many consumers in the individual market, in many parts of the country, it doesn’t seem like much of a choice.
We are down to one insurance provider in our county this year. Even if we went from an HMO to a PPO, it doesn’t exactly give one broad access to the best providers in the metro area. Sure, if we went with a PPO the network would not be as narrow as the HMO, but at what cost?
We already feel the least expensive HMO plan is a whole lot of money. I’d love to be able to vote with my dollars and choose a less narrow network, but I cannot justify a monthly payment that would be more than our mortgage!
Nevertheless, I do feel it’s better than nothing, and I hope improvements will be made.
In the places where there WAS a choice, consumers went for the cheaper choice. That is why the insurance companies that were expert in setting up inexpensive networks, which were the insurers who previously worked in Medicaid networks, were the most successful.
People pick by price. If there is cheap insurance with a narrow network, and expensive insurance with a wide network, people will complain. And the large majority will pick the cheap option. Therefore, we need to make sure that the narrow networks are adequate.
That's the problem with all these discussions. Although I have a lot of experience in economics and in business, I have never studied the economics of the healthcare industry in the US. But I do know that it's very complicated. It would take a minimum of 6 months of serious, full time study just to understand the basics.
Almost everyone who claims that they have a solution that is both economically and politically viable is selling snakeoil. At best, they have good guesses. If you aren’t an expert but you think that you understand the issues then you are kidding yourself.
But for now, let’s remember some of this is still dependent on where you live. I had (and have now, under Medicare,) an HMO-type. And it is extensive, essentially works like a PPO. Please don’t misunderstand me- I know this is rotten in some areas, a real inequality of the right services available. But when we view ACA as a whole, we need to understand the dang issue with state involvement- both on the front end and on the back end, where they don’t foster better services all around, don’t work to resolve the issue of hospitals dropping out or no adequate number of doctors.
Even if we somehow got to more choice in moderately priced policies or universal insurance, the supply issue can continue. That’s “ground level,” to me.
I have no problem with narrow networks that still provide coverage. One of my kids bout the ONLY individual plan available in his state. Most doctors don’t accept it…thats not just narrow…it’s restrictive.
His docs have told him…they do not participate in the HMO plan (singular).
It’s a sad state of affairs when the only place to get primary care accepting your insurance is the Minute Clinic.
Regarding consumer preference for cheaper plans with narrower networks, note that many purchasing choices are made by employers, not users. So there may be an even stronger tendency to go cheap than if the user is making the choice among all of the available options.
In some places, folks purchasing individual plans have only ONE choice…which means if they want insurance…they have no choice but to buy the one plan.
So what are the fallacies, al2simon? The author of the article, Tim Mullaney, is an economics writer, so presumably he doesn’t know nothing. More relevantly, he talked to Larry Levitt at the Kaiser Foundation, who is in fact an expert on health care economics.
Seems to me Molina and Centene are making money because their products are cheaper, so they get more customers and healthier customers.
There was an article in today’s paper that Viagra is $50 per pill. Now there’s something that could be stripped out of coverage under insurance plans to save money.
@ucbalumnus True, most people who have insurance are covered by their employers, but it was the individual market where most of the abuses occurred before ACA, and where most of the fixes are concentrated. That is a much smaller, but not insignificant, number of people. ACA also does affect employer plans in some important ways, bringing them up to standards on essential benefits, medical loss ratio, among others. But the group market was not changed by ACA nearly as much as the individual market was, and shouldn’t be drastically affected by repeal-and-replace.
But that’s only true if the reformers don’t kill the individual market by, for example, repealing the unpopular funding mechanisms while leaving in place the popular provisions like guaranteed issue. There’s your death spiral, and if the individual market goes belly up or gets catastrophically expensive for the insurers, they might want to recoup their losses in the group market.
Tatin, not as long as men are running the health insurance industry. 
They could bring back the stripped down policies (again like car insurance). The effort should be so that everyone has a plan but it doesn’t need to be a Rolls Royce plan. Men and women over a certain age should be able to have a plan without maternity coverage, for example. People should be able to get the coverage they need. If you don’t need certain things, you should not have to buy it. Bring down costs and more people would buy and not grumble.